The Japanese economy has lessons for the West... and China as well

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Japanese prime minister Shinzo Abe at the start of the country's election campaign

You will by now know the result of the Japanese general election. Normally such events would not be of much interest in Europe. But this is different.

Over the past 30 years or so, Japan has been a testing ground for many of the economic issues that have come to beset the West.

This Japanese experience was widely discounted on the grounds that it was the result of uniquely Japanese conditions. We should not make that mistake again.

In the Eighties, the Japanese economy surged and Japanese asset prices surged even more. It was widely believed that Japan would at some point come to surpass the US in technological prowess, GDP per capita and influence in the world.